I was thinking a bit about Jeff Skilling (former Enron CEO) today.  What must he be thinking as a series of large firms that were supposedly far more stable than Enron go down one after the other to liquidity crises much like that of Enron?  Bear Stearns and Lehman, two firms that should have been rock solid, go down in the blink of an eye in a credit crunch, and all we hear from the media is how the firms fell victim to larger forces beyond their control.  At least at Enron they were up-front with the market about their taking on large risks.  Now, the government is running around in the background trying to match-make these failing companies and helping to save at least a squidge of shareholder equity.  The only thing the government did in the Enron collapse was hound Skilling and others into jail.   

Sure, Skilling may have made some overly optimistic statements about his company as he was trying to stave off the crunch, but no more so that the happy-face statements issuing from Bear or Lehman in their final days.  Executives who find themselves in a credit crunch are in a nearly impossible position.  The best way they can serve equity holders is to downplay or even bury bad news to head off the looming crisis of confidence.  But if they do so, they face presecution for making false statements about the company, ironically under laws meant to protect equity holders.

First it was breast implants, then thimerosal, and now it is phthalates.  Each have been attacked in turn by the junk-science / media / tort law complex.  Nobel Prize-winning chemist William Knowles wrote this week:

Lawmakers — representing the concern of parents influenced by certain
environmentalists — are calling for an outright ban of phthalates from
children’s toys because of the misguided belief that by exposing
children to toys made with these chemicals we are putting their health
at risk.

Phthalates have a long history of attacks by environmental groups
dating back more than 30 years. Even then babies were of prime
consideration. Few chemicals have undergone such extensive testing and
survived as being safe. In fact, diisononyl phthalate, the most
commonly used phthalate in children’s toys, has been subjected to more
than 200 tests….

Today, with no new scientific evidence, we are again challenging
phthalates as dangerous to babies and threatening to ban them. These
are products that have survived the toughest test of all, the test of
time. There is no evidence that babies or anyone else has ever been
harmed by them.

Eliminating phthalates from consumer products would be a true
challenge. Even more worrisome, however, is the notion that any
replacement would ever be able to pass the extreme scrutiny diisononyl
phthalate and other phthalates have.

There is nothing wrong with examining the products our children
come into contact with to be sure they pose no health risks. However,
in this case, it would be a great mistake to ban what has been proven
to be a benign product without some further scientific evidence.

I am just fine with prosecuting mortgage brokers for fraud  who deliberately misrepresented the payments and risks of the loan products they were selling.  However, to be fair, we must then also prosecute borrowers and home buyers who deliberately misrepresented their assets and income to lenders, actions that are equally fraudulent.

Or, we could just let the whole foreclosure and bankruptcy system sort everything out and let bygones by bygones. 

Interestingly, it seems to be advocates for borrowers who want to stir the whole fraud thing up and are reluctant to just let the system play itself out.  I find this odd, for a couple of reasons:

• Fraud by lenders will be hard to prove, since they all are covered by written disclosures that I am sure reveal all the terms of the loan.  The government itself has designed a number of written disclosures lenders must use  [by the way, if reformers want to start somewhere, they might begin with these government disclosures.  My experience is that they are silly and uninformative, and were put together by someone in the government who does not actually understand loans].  Fraud by borrowers, on the other hand, should be dead-easy to discover – they signed their name to an income statement and list of assets and liabilities which are quite easy to check.
• The current foreclosure and bankruptcy system is pretty fair to borrowers.  In particular, in the case of subprime loans where the borrower has little equity, foreclosure costs almost nothing in current dollars – all the loss is on the bank, with absolutely no come-backs on the borrower in the future.  The borrower must endure years of difficult credit and rebuilding trust in the system, but that is the kind of minimum cost we should expect a foreclosure or bankruptcy to carry.  We always seem to get worked up about foreclosures, because we have this picture of someone losing a home they have lived in 20 years and losing all their equity.   But in these subprime cases, where the buyer has been in the home only a few months and put in virtually no equity, I think our mental picture of the costs, at least to the borrower, of foreclosure are overblown.

As an aside, I am easily convinced that there were many mortgage brokers offering their customers atrociously bad deals and rates.  I can’t imagine personally not shopping around for mortgage rates from multiple suppliers, but there are clearly people who want to walk into one guy’s office and buy something from that first person.   And a number of these people chose to do business with firms that gave them really poor service (if service is defined as getting the best possible loan for the buyer).  Which gets me to the subject of branding.

I know that there are a lot of folks, particularly on the left, who hate large corporations and national brands, but to a large extent the uneven and unpredictable quality of mortgage brokers may be due to a lack of national players and national brands in mortgage brokering. 

Mortgage brokers, stock brokers, and real estate brokers are all licensed by the government.  By statist thinking, that should be enough to ensure quality.  But while stock brokers and real estate brokers can be independent, most of them have organized themselves into groups under a brand name (e.g. Merrill Lynch or Century 21).  Few such national brands, if any, exist in mortgage brokering.

These brands exist because they have proven themselves useful and valuable to consumers.  Presumably they communicate some form of quality or reliability or capability beyond the level that having a government license affords.  This is not necessarily a gaurantee of perfection, of course.  Certainly Merrill Lynch brokers, form time to time, have been accused of fraudulent behavior.  But Merrill has been very fast to act on these occasions, taking actions designed to save its brand from being tainted.  It is this incentive, plus the history such brands carry in the collective memory, that gives consumers extra confidence to use brokers with these brands rather than individual practitioners.

If I was a contrarian with a load of money and a knowledge of mortgage brokering, I might be thinking about building a Century 21 or Remax-type brand in mortgage brokering.

The likely Republican presidential nominee is well to the left of the last Democratic president on economic issues.  And George McGovern sounds Laissez Faire:

Under the guise of protecting us from ourselves, the
right and the left are becoming ever more aggressive in regulating
behavior. Much paternalist scrutiny has recently centered on personal
economics…

Since leaving office I’ve written about public
policy from a new perspective: outside looking in. I’ve come to realize
that protecting freedom of choice in our everyday lives is essential to
maintaining a healthy civil society.

Why do we think we are
helping adult consumers by taking away their options? We don’t take
away cars because we don’t like some people speeding. We allow state
lotteries despite knowing some people are betting their grocery money.
Everyone is exposed to economic risks of some kind. But we don’t
operate mindlessly in trying to smooth out every theoretical wrinkle in
life.

The nature of freedom of choice is that some people will
misuse their responsibility and hurt themselves in the process. We
should do our best to educate them, but without diminishing choice for
everyone else.

Really, its that George McGovern.

And David Mamet questions the power of government:

And I began to question my hatred for “the Corporations” – the
hatred of which, I found, was but the flip side of my hunger for those
goods and services they provide and without which we could not live.

And I began to question my distrust of the “Bad, Bad Military”
of my youth, which, I saw, was then and is now made up of those men and
women who actually risk their lives to protect the rest of us from a
very hostile world…

But if the government is not to intervene, how will we, mere human beings, work it all out?

I wondered and read, and it occurred to me that I knew the
answer, and here it is: We just seem to. How do I know? From
experience…

Strand unacquainted bus travelers in the middle of the night,
and what do you get? A lot of bad drama, and a shake-and-bake Mayflower
Compact. Each, instantly, adds what he or she can to the solution. Why?
Each wants, and in fact needs, to contribute – to throw into the pot
what gifts each has in order to achieve the overall goal, as well as
status in the new-formed community. And so they work it out.

And so I, like many of the liberal congregation, began, teeth
grinding, to attempt to do so. And in doing so, I recognized that I
held those two views of America (politics, government, corporations,
the military). One was of a state where everything was magically wrong
and must be immediately corrected at any cost; and the other – the
world in which I actually functioned day to day – was made up of
people, most of whom were reasonably trying to maximize their comfort
by getting along with each other (in the workplace, the marketplace,
the jury room, on the freeway, even at the school-board meeting).

And I realized that the time had come for me to avow my
participation in that America in which I chose to live, and that that
country was not a schoolroom teaching values, but a marketplace…

At a recent meeting of the National Associate of State Treasurers
(Yawn), John Podesta, after stating hilariously that what the world
really needed was continued leadership by state treasurers on the
global warming issue, argued: 

"Climate change is a threat to the long-term value of the economy and
failure to calculate its impacts or manage or reduce its harm mean that
our assets are being over valued, and the risks we face are being under
reported."

I have a lot of interest in global warming, which is why I created a second blog Climate Skeptic to deal with these issues.  There is a lot about anthropogenic warming we do not understand.  But what is nearly a total 100% lock is that, at least for the United States, the cost to our economy of regulations to limit CO2 will be far higher than the likely net-negative effects of warming (Al Gore’s 20 foot sea level rises and other anti-rational claims notwithstanding).  At its heart, isn’t the risk really of damage from government regulation, rather than the climate?

Via Michael Giberson of Knowledge Problem, the NY Attorney General is concerned that certain companies are not disclosing global warming-related risks, but he is at least more honest about what those risks are:

Last Friday, New York Attorney General Andrew Cuomo sent subpoenas
to five power generating companies seeking to find out if the companies
had properly disclosed financial risks associated with proposed new
coal-fired power plants.

All five of the letters accompanying the subpoenas are available from the NYAG’s website.  Here is the opening paragraph of the letter to Dominion Resources, Inc.:

We are aware that Dominion Resources, Inc., (“Dominion”)
has plans to build a coal-fired electric generating unit that would
generate 585 megawatts of electricity without current plans to capture
and sequester the resulting carbon dioxide (CO2) emissions. The
increase in CO2 emissions from the operating of this unit, in
combination with Dominion’s other coal-fired plants, will subject
Dominion to increased financial, regulatory, and litigation risks. We
are concerned that Dominion has not adequately disclosed these risks to
its shareholders, including the New York State Common Retirement Fund,
which is a significant holder of Dominion stock. Pursuant to the
Attorney General’s investigatory authority under New York General
Business Law § 352, and New York Executive Law § 63(12), accompanying
this letter is a subpoena seeking information regarding Dominion’s
analysis of its climate risks and its disclosures of such risks to
investors.

A little later, the letter gets more specific: "For example, any one
of the several new or likely regulatory initiatives for CO2 emissions
from power plants – including state carbon controls, EPA’s regulations
under the Clean Air Act, or the enactment of federal global warming
legislation – would add a significant cost to carbon-intensive coal
generation, such as the new coal plant planned by Dominion." In
addition to Dominion, the NYAG’s office sent subpoenas to AES, Dynegy,
Peabody, and Xcel. Here is the story from the New York Times.

The letter doesn’t say so explicitly, but I’m sure the message was
clear, that in addition to new or likely legislative actions and
substantive regulatory initiatives, the companies also faced the risks
and costs associated with being harassed by swarms of officers from the
NYAG’s office.

You can see what is going on here — following in the rich tradition established by the egregious Eliot Spitzer, the NY AG is again overreaching his office’s authority and attempting to set regulatory policy rather than enforce it.  But at least he is honest in portraying the main risk to be a government regulatory backlash on these companies.

Thinking about this, couldn’t every company put this in their boilerplate?  I mean, for most of us, the number one risk we face all the time is that the government will either do something to us specifically or the economy in general to hurt results.  Let’s just have everyone add the line "the government poses a huge risk to our business plan" and be done with it.

I could probably fill this blog with absurd examples of American middle class snobbery, but I thought this one from TJIC was particularly good:

…Eleven tonnes of papayas were dumped outside the Agriculture and
Cooperatives Ministry yesterday by Greenpeace in protest at …
open-field trials of genetically-modified crops.

…people flocked to load up on the free papayas, ignoring the environmental organisation’s campaign against … GM fruit…

Many passers-by, who mostly knew nothing about transgenic fruit, said they did not care about any health risks.

They were just thinking about how hungry they were…

A while back I wrote about this same phenomenon:

Progressives do not like American factories appearing in third world
countries, paying locals wages progressives feel are too low, and
disrupting agrarian economies with which progressives were more
comfortable.  But these changes are all the sum of actions by
individuals, so it is illustrative to think about what is going on in
these countries at the individual level. 

One morning, a rice farmer in southeast Asia might faces a choice.
He can continue a life of brutal, back-breaking labor from dawn to dusk
for what is essentially subsistence earnings.  He can continue to see a
large number of his children die young from malnutrition and disease.
He can continue a lifestyle so static, so devoid of opportunity for
advancement, that it is nearly identical to the life led by his
ancestors in the same spot a thousand years ago.

Or, he can go to the local Nike factory, work long hours (but
certainly no longer than he worked in the field) for low pay (but
certainly more than he was making subsistence farming) and take a shot
at changing his life.  And you know what, many men (and women) in his
position choose the Nike factory.

Much of the opposition to factory wages in Asia can be boiled down to members of the American middle class saying "I would never accept that job at that rate, so they should not either."

From Fred Thompson, via Insty:

But he received his biggest applause for blasting the bipartisan plan
for immigration reform, which he called unworkable. "We are a nation of
compassion, a nation of immigrants," he said. "But this is our home . .
. and we get to decide who comes into our home."

Isn’t this an essentially socialist view of property, that the whole country is essentially owned by all of us collectively and it is our government’s responsibility to administer access to this community property?

I am just completing a course on the history of Rome from the Teaching Company (whose products have been universally excellent in my experience).  One of the interesting things that contributed substantially to Rome’s strength, at least through the BC years, was their flexibility and success in absorbing many different peoples into the state.  They actually had various grades of citizenship, including such things as Latin Rights where certain peoples could get access to some aspects of citizenship (e.g. ability to conduct commerce and access to the judicial system) while being denied others (e.g. voting). 

Can’t we figure out something similar?  Shouldn’t it be possible to allow fairly open access to being present and conducting commerce in this country, while still having much tougher and tighter standards for voting and getting government handouts?  The taxes immigrants pay easily cover things like emergency services and extra load on the courts, but fall short of covering extra welfare and education. 

Unfortunately, the debate seems to be dominated either by Lou Dobbs racists who see Mexicans as spreading leprosy or by Marxists who see poor immigrants as a wedge to push socialism.  The problem is again traceable to a President who tries to lead on divisive issues without trying to clearly communicate a moral high ground.  For example, I would have first tried to establish one simple principle that has the virtue of being consistent with most of America’s history:   

"The US should allow easy access to our country for immigrants, but immigrants should expect that immigration involves financial risks which they, not current Americans, will need to bear.  Over time, they will have access to full citizenship but the bar for such rights will be set high."

OK, it needs to be shorter and pithier, but you get the idea.  Reagan was fabulous at this, and Clinton was pretty good in his own way.  Bush sucks at it.

FIRE points out yet another university that is attempting to restrict speech it does not agree with, in the name of, uh, freedom or something.  The university’s Student Union proposed to close down the campus humor magazine that made a joke about race relations.  The reason?

Specifically, in response to the “overtly racist, sexist, and generally
offensive articles, statements, and images published in the Spring
Issue of Gravity Magazine,” and because the publication of this joke
had caused “members of our community to feel ‘unsafe,’ ‘powerless,’
‘unsupported,’ ‘harassed,’ and ‘threatened;’”

Now, this university is private, so I suppose as a private body they can define acceptable speech in their private confines any way they want (just as my kids dropping F bombs is legal by the first amendment, but banned in my household).  However, I fear that the folks involved do not understand that they need to leave these attitudes behind when they leave their private little cocoon university, because speech that hurts your feelings is not illegal, thank goodness, in the rest of the country. 

Unfortunately, it is almost too much to ask nowadays that universities understand that, as Louis Brandeis wrote, the best response to speech you don’t like is more speech.  The rich irony comes from the fact that this occurred at … Brandeis University.  The freaking place was named after the man who wrote:

Those who won our independence believed… that freedom to think as
you will and to speak as you think are means indispensable to the
discovery and spread of political truth; that without free speech and
assembly discussion would be futile; that with them, discussion affords
ordinarily adequate protection against the dissemination of noxious
doctrine…

They recognized the risks to which all human institutions are
subject. But they knew that order cannot be secured merely through fear
of punishment for its infraction; that it is hazardous to discourage
thought, hope and imagination; that fear breeds repression; that
repression breeds hate; that hate menaces stable government; that the
path of safety lies in the opportunity to discuss freely supposed
grievances and proposed remedies; and that the fitting remedy for evil counsels is good ones.

Fear of serious injury cannot alone justify suppression of free
speech and assembly… To justify suppression of free speech there must
be reasonable ground to fear that serious evil will result if free
speech is practiced… [N]o danger flowing from speech can be deemed
clear and present unless the incidence of the evil apprehended is so
imminent that it may befall before there is opportunity for full
discussion. If there be time to expose through discussion the
falsehoods and fallacies, to avert the evil by the process of
education, the remedy to be applied is more speech, not enforced silence. Only an emergency can justify repression.   (Emphasis added.)

Check out the FIRE article to learn much more about the events in question, including what the original joke was.

I don’t have any particularly intelligent analysis of the SCOTUS’s upholding the constitutionality of a partial birth abortion ban, so I won’t offer any.

However, I have a question for women’s groups.  Groups like NOW support the federal government’s constitutional right to ban breast implants,and in fact call for such a ban on the NOW web site.  Simultaneously, they oppose the federal government’s constitutional right to ban partial birth abortions.

My question is:  How can you reconcile these two views?  Aren’t these two procedures similar enough (both are elective medical procedures that are invasive of a woman’s body) to be Constitutionally identical?  I understand that from a social conservative’s point of view that the abortion procedure might warrant more legal attention if you believe there is a second life (ie the fetus) involved here.  But how do you justify that the feds should have more power to regulate and ban boob jobs than they have to ban one type of abortion?  And please, don’t justify it because you think abortion is serious but breast implants are frivolous  Those are legislative and political arguments about what should and should not be done with the fed’s power, not Constitutional arguments about what that power actually is.

The women’s groups’ application of their "its our body" and "pro-choice" positions have always struck me as incredibly selective.  It’s a woman’s choice to weigh the risks and benefits of an abortion, but apparently it’s the government’s choice to weight the risks and benefits of breast implants.  I wrote more about this selective libertarianism when I made a plea for applying the privacy and choice logic of abortion supporters to all aspects of government regulation.  I criticized NOW for another instance of selective libertarianism associated with government and women’s bodies when NOW supported having the government limit a woman’s choice to use Vioxx to relieve pain.

Last weekend I was watching an NFL game (I forget which one) and the team, which already had a solid lead, was considering going for a TD rather than a field goal at fourth and goal.  The announcer was going "Bad idea, bad decision.  Take the field goal and the sure points.  You don’t want to risk getting the other team back in the game with the emotional prop of stopping you at fourth and goal."  Well, the team went for it and made the touchdown, after which the announcer said "I guess it was a good decision after all."

But was it?  If you choose to hit a nineteen in blackjack, and pull a deuce, was it a good decision?  If you  placed a 50-50 bet that a normal die roll will come up with a "6", and it does, was that a good decision?  I would say no.  I would argue that both decisions were bad decisions, despite the fact they happened to yield positive results for the decision-maker.  The reason is that, given the information the decision-maker had at the time of the decision, both moves have an expected value less than zero.

I won’t bore my audience with a digression too far into expected value and decision trees.  Suffice it to say that the standard approach for making decisions in uncertainty is to list the possible outcomes of the decision, assign values and probabilities to each outcome, and then total up the sums.  The decision that yields the highest value times probability is the is the one that you would expect, on average, to yield the highest value.   Take the example of the bet on the die roll above.  If you bet a dollar, you would win a dollar on a roll of "6", which is a 16.7% probability.  You would lose a dollar on a roll of 1-5, which is a 83.3% probability.   The value of the "don’t bet" decision is zero.  The value of the "bet" decision is 16.7% x $1 plus 83.3% x -$1 equals -$0.67.  So the "no bet" decision is best, since at zero it is higher than the negative outcome of the "bet" decision.  Here is a more complete discussion of the decision tree process.

A couple of provisos:

• When the situation is more complex, the trick of course is to assign the right values and probabilities.  We can assign these exactly for cards and dice, but it’s a little harder for something in the business world, like say Enron’s decision to enter the broadband business.  But managers are paid the big bucks to do their best.  And managers have tools at their disposal to manage their lack of information.  For example, once you build a base-case, you can ask questions like  "OK, I am not sure about the size of the broadband market, but how large does it have to potentially be to offset the risk involved."
• Like many real-world processes as the approach the asymptotes,  things get a bit squirrelly for really small probability events, particularly when they have very large financial values (positive or negative) attached.  Small probability positive events are essentially a lottery, and many people buy lottery tickets, even though we know the expected value is less than the price.  I play blackjack too, despite a negative expected value, because I get non-monetary benefits from the play.  Small probability negative events are called disasters, and are things we insure for.  Many times the decision to buy insurance has a negative expected value, but we do it anyway because we would sleep better at night knowing that we may be throwing away a little expected value, but we have pre-empted an event that would bankrupt us.  Here we get into interesting topics of risk profiles and risk tolerance, which I will avoid.

Unfortunately, in evaluating historical decisions, we often ignore the state of facts and risks the decision-maker faced at the time of the decision.  We argue Mead should have pursued Lee harder after Gettysburg, because we know now Lee’s army got trapped behind a swollen river. The Chargers shouldn’t have traded half their assets** to move up one spot in the draft to get Ryan Leaf.  And Enron should not have entered the broadband business.   We treat the decision makers in each of these as boneheads today (we even threw Skilling in jail, as much for his failed business decision as for any fraud).  But all of these evaluations are based on the outcomes, not on what the decision-makers were facing at the time.  Mead had been in charge of the army for less than a week, had driven Lee from a battlefield for the first time ever, and had a primary charge of defending Washington.  It is hard to believe today, but the Peyton Manning and Ryan Leaf were considered nearly equivalent in quality in the ’98 draft, and the Chargers trade might have been perfectly appropriate if they had actually gotten a Manning-quality quarterback.  Enron’s vision of broadband looked like it would become an enormous business, which in fact it did, just five years too late for them.

** The Chargers traded an inventory of picks and players to the Arizona Cardinals, who, true to form, did nothing with this goldmine.  The Cowboys, by contrast, arguably built a whole dynasty in the 90′s off the slew of picks they got in the Herschal Walker trade with Minnesota.

Dale Franks at QandO, quoting some from John Derbyshire, raise a key question that certainly has always concerned me as a pro-immigration libertarian:

As to why I think libertarians are nuts to favor mass uncontrolled
immigration from the third world: I think they are nuts because their
enthusiasm on this matter is suicidal to their cause. Their ideological
passion is blinding them to a rather obvious fact: that libertarianism
is a peculiarly American doctrine, with very little appeal to the
huddled masses of the third world. If libertarianism implies mass
third-world immigration, then it is self-destroying. Libertarianism is
simply not attractive either to illiterate peasants from mercantilist
Latin American states, or to East Asians with traditions of
imperial-bureaucratic paternalism, or to the products of Middle Eastern
Muslim theocracies.

In other words, by open immigration, are we letting in waves of people from statist traditions that will drive the US further away from an open, liberal society.  This worries me from time to time, enough that I don’t have a fully crafted response that I consider definitive.  However, I want to offer some initial thoughts.  Before I do, here are two background points:

1. I think the freedom to move to another country, take a job there, buy property, live there, etc. is a basic individual right that should not be limited to the accident of not having been born originally in that country.  Freedom of association is a right of all human beings, not merely a result of citizenship.  I go into these arguments in much more detail here.
2. Note that immigrant status and citizen status are two different things.  Immigrant means that you are present in a country but not a citizen.  As an immigrant, I believe you should be able to own property, accept employment, and most of the other things you and I do every day.  However, immigrants don’t vote.  Only the narrow class of people called citizens may vote, and there is some process where over time immigrants can meet some hurdles and become citizens.  The key problem for a libertarian, which I think Dale Franks would agree with, is "which status must you be to get government handouts?"  My view is that only citizens should get most handouts, like welfare and food stamps and such, though immigrants should have access to things like infrastructure (highways) and emergency services.  It is when one argues that any immigrant should have access to all this stuff that the whole immigration picture becomes a total mess.

With those couple of things in mind, here are my thoughts on the issue Franks raises:

• The US is not made up primarily of Scots and Dutch, two areas that can legitimately claim to have strong liberal traditions.  Most of our past immigration has come from Ireland and Germany and Scandinavia and Eastern Europe.  None of these areas particularly have a liberal tradition, and many were nationalistic-militaristic-paternalistic governments.  Also, we may forget it today, but when countries like Ireland where a large source of our immigration in the 19th century, they were a third world country at the time.  Just look at Vietnam — it has one of the worst traditions I can think of, but as a class Vietnamese immigrants tend to be capitalist tigers.
• Depending on how one counts it, US citizens are already 65%-85% statist anyway, so I am not sure immigration is going to change the mix negatively.  In other words, the statist train has already sailed.  In fact, statism has flourished in this country from 1930-1980 during exactly the same period of time we were most restrictionist in immigration.  Sure, correlation is not causation, but certainly you can’t prove to me that restrictionist immigration slows statism in any way. 
• Much of the statist economic policies in this country were launched by Wilson and Roosevelt, from two of the more blue-blooded families in America.  Now this may not mean much.  What I don’t know, because I don’t know enough history of the period, is this:  Did support for New Deal (and more extreme socialist NRA-type policies) come disproportionately from new immigrants?  My sense is exactly the opposite, that in fact some New Deal policies like the minimum wage were aimed by nativists at circumscribing the opportunities of immigrants.
• In effect, the author is advocating that we limit the freedom of movement and property ownership of people not born in the US because we are afraid that these new entrants into our country will bring political pressure to undermine individual rights.  I think that is a legitimate fear, but if I accept that argument, I don’t know why I would not also have to accept the argument that we should take away the freedom of speech from people who argue for limitations of individual rights.  In both cases, we are giving political access to people who want to undermine our basic liberties.  My conclusion:  I can’t go there in either case.  I refuse to put a political test on the exercise of individual rights, even for people with really bad politics.
• A well-crafted welfare regime would make the problem a lot better.  I am not so unrealistic to expect the welfare state to go away tomorrow, but I do think that the political will can be mustered to deny substantial benefits to new non-citizen immigrants.  Which way we go on this will decide whether we can open up immigration.  If welfare handouts to immigrants are limited, then new immigrants will tend to self-select towards those looking to work hard and take risks to make it on their own.  This will mitigate the author’s concern, and is in fact how we have maintained our culture of liberality through a history that was dominated mostly by open rather than closed immigration.  If welfare handouts are generous to new immigrants, then immigrants will self-select to people looking to live off the state.  If we insist on the latter, then I guess I will agree that immigration needs to be limited (though there is an even better reason for doing so in that we will, in that case, surely bankrupt ourselves.)

In what is becoming a Thursday night tradition, I am posting the next two chapters, numbers three and four, of my book BMOC.  The first two chapters were posted here.  The next chapters after these are here.  Before we start, here are some of the "reviews":

“Who
is this guy?  You’re not allowed to portray lawyers in novels as
anything but dedicated warriors for the common good.  In the words we
teach all of our clients when they are suing for millions over
spilled coffee, ‘it is not about the money.’  We hate this book,
and if you read it, we will sue you.”

–
America’s tort lawyers

“This
Meyer person obviously never read the instruction manual for writing
novels.  Journalists are supposed to be brave and honest, while
corporations are supposed to be evil and rapacious, not the other way
around.”

–
Other modern novel writers

“It’s
not that bad here.”

–
The Harvard University administration

“I
was kind of proud that Warren wrote a novel, but then I read it and
saw the dirty stuff and all the bad words.  Now I am really
embarrassed.”

–
Warren’s mother

“We
are shocked that anyone would imply that our legislative efforts are
aimed more at helping favored political supporters than championing
the common man.”

–
Congress

“This
is what he was doing at the office instead of driving the kids to
soccer?  Writing a novel? I thought he was doing work!”

–
Warren’s wife

“Warren
was never my student.  I swear.  Don’t even think about blaming
this on me.”

–
Warren’s high school English teacher

And now, chapters three and four:

chapter three

It was one
of those rare, perfect weather days in New York City – sunny and 70
degrees.  A few weeks from now, it would be slit-your-throat weather,
so hot and humid that the grime from the surrounding buildings would
seem to leech into your pores.  On a beautiful day like this,
everyone was in a better mood, and New Yorkers could almost creep up
the attitude scale to “human”.  Now, it wasn’t like they would
smile at you and wish you a good day, but it did mean that if you
keeled over unconscious in the middle of the sidewalk, someone might
check on you rather than just stepping over your body on their way to
lunch.

Continue reading ‘BMOC, Chapters 3 and 4’ »

Steven Milloy, author of the indispensable Junkscience.com, points out that Harvard’s Ascherio and WIllet, authors of the study on which NYC’s transfat ban was based, have also identified dangers of a similar magnitude and with similar statistical significance (the latter admittedly low, but it was low for their transfat conclusions as well) of:

• Sunflower oil
• Red meat
• Dairy products
• Soft drinks

If NYC is consistent in its logic, then it must ban these other substances.  These substances showed the same level (or greater) of health risks at the same level of scientific proof by the same study authors. 

Now that the Board has deemed their dubious trans fats research
suitable for dictating public policy, New Yorkers ought to hope that
Ascherio and Willett don’t press the Board to implement some of their
other published research that is similar in "quality" to their trans
fats work.

 

New Yorkers could, for example, see restaurants
banned from serving potatoes, peas, peanuts, beans, lentils, orange
juice and grapefruit juice. Ascherio-Willett reported an increase in
the risk of heart disease among consumers of these foods in the Annals of Internal Medicine
(June 2001). Although none of those slight correlations were
statistically meaningful — and, in all probability, were simply
meaningless chance occurrences — a similar shortcoming didn’t seem to
matter to the Board when it came to their trans fats research.

When I see statements like this, I am left to wonder whether folks on the left really believe this, or if it is just throwaway political rhetoric which no one really expects intelligent people to believe (key passage in bold):

But how are people dealing with these drops on their own today?
Mostly by going into debt. As I show in my book, median household debt
as a share of income for married parents was more than 125 percent of
income in 2004. The economist Herb Stein once said, "If something can’t
go on, it won’t." And the debt hemorrhage of the American family simply
can’t go on.

If the returns of rising risk add up to the ability to borrow more
to dig oneself out of short-term holes (thus digging a deeper long-term
hole), then I think we can safely say that most Americans would be
happy to give up the returns to obtain greater security.

But here’s the kicker: We can provide security and help our
economy. Just as businessmen and entrepreneurs are protected against
the most severe economic risks they face to encourage economic
investment and growth, we are most capable of fully participating in
our economy, most capable of taking risks and looking toward our
future, when we have a basic foundation of financial security.

How are businessmen and entrepeneurs protected?  By who?  I own and run my own small business, and I have yet to encounter
anyone who has given me any help or succor in our bad years. Or good
years. I don’t even get covered by the minimum safety net type stuff my
employees have (workers comp, unemployment) without paying extra out of
my own pocket, which they don’t have to do.

This is exactly the kind of throwaway absurdly false statement that
makes it impossible for me as a small business owner to take anyone on
the left seriously, however much I am attracted to them for their
position on a variety of social and war issues. I am sure that this is
the type of statement that most of his readers on the left nod their
heads to, sure that all of us business owners are all dialed into the
fat life somehow via the government, when in fact I spend most of my
life dealing with the myriad of government-required wastepaper that
makes it nearly impossible to run a business at all.

  I am certainly willing to believe that there are certain Fortune
100 companies that recieve all sorts of government rents — Steel
companies, in the form of protectionism; Wal-mart, in tax abatements
and eminent domain handouts; ADM, in the form of ethanol subsidies;
tobacco companies, in the form of government roadblocks to new
entrants.

However, these type of large politically connected corporations make
up about .001% of the total mass of corporations. And, entrepeneurs,
unless they are already rich and powerful from a previous business,
never get any breaks and in fact often face government roadblocks set
in place by powerful incumbents with political pull. I am all for
eliminating these coporate welfare handouts and incumbent protection
schemes. Before you scream aha! remember that 3 of the 4 government
rent recipients I listed as examples are beneficiaries of programs from
the left side of the aisle.

I discussed this risk-shift concept in more depth here.  One thing I didn’t mention in the previous article was the author’s attempt to tie household debt to income risk.  I skimmed the book and didn’t see any
empirical linkage between rising income uncertainty and household debt.
I am willing to believe they both went up at the same time, but
correlation is not equal to causation. Ten years ago, when folks
lamented rising household debt, it was an issue of personal
responsibility and having the discipline to live within one’s means.
Are we past that now? Is debt really going to be added to the list of
things nowadays that are-not-my-fault?

Update:  If he is referring to stuff like this, I share his outrage.  But it doesn’t justify his general statement.

I guess it’s inevitable come election time, but a cottage industry has arisen of late to spread the word that the US economy is broken and that conditions for all but the rich are actually eroding.  This historically has been a winning strategy — Remember, in late 1992 Bill Clinton campaigned with the absurd (but generally unchallenged in the media) contention that it was the worst economy since the Great Depression.  Most of the lamentations about the current condition of the poor and middle class are presented with the standard populist baggage that the economy is zero-sum, and these groups ills are somehow related to and the result of the income growth of the very rich.

Jacob Hacker of Yale now adds to the chorus, arguing that in addition to worse material fortunes, the middle class faces more risk.  As someone who gave up a good, high-paying job in corporate America for the risk roller coaster of running by own business, I have little sympathy — after all, I am part of his trend and I happily chose my path.  And its astonishing to me in this day and age anyone can argue that we have too much of a culture of personal responsibility.  Please.

However, rather than fisking this in depth, I will leave the task to my much more capable ex-roommate from Princeton, who also happens to be a senior something-or-other at Cato, Brink Lindsey:

But if we’re talking about
security from material deprivation, that’s a different story. Let’s
start with the biggest risk of all: that of premature death. Back in
1970, during Mr. Hacker’s golden age of economic stability and
risk-sharing, the age-adjusted death rate stood at 12.2 deaths per
1,000 people. By 2002, it had fallen more than 30%, to 8.5 per 1,000.
In particular, infant mortality plummeted to 7.0 from 20.0, while the
number of Americans killed on the job dropped to three per 100,000
workers from 18.

Next, look at the two main
indicators of middle-class status: a home of one’s own and a college
degree. Between 1970 and 2004, the homeownership rate climbed to 69%
from 63%, even as the physical size of the median new home grew by
nearly 60%. Back in 1970, 11% of Americans 25 years of age or older had
a college or higher degree. By 2004, the figure had risen to 28%.

As to consumer possessions, the
following comparison should suffice to make the point. In 1971, 45% of
American households had clothes dryers, 19% had dishwashers, 83% had
refrigerators, 32% had air conditioning, and 43% had color televisions.
By the mid-1990s all of these ownership rates were exceeded even by
Americans below the poverty line.

No matter how the
doom-and-gloomers torture the data, the fact is that Americans have
made huge strides in material welfare over the past generation. And
with greater wealth, as well as improved access to consumer credit and
home equity loans, they are much better prepared to deal with the
downside of increased economic dynamism.

Mr. Hacker leans heavily on his
findings that fluctuations in family income are much greater now than
in the 1970s. But research by economists Dirk Krueger and Fabrizio
Perri has shown that big increases in the dispersion of income have not
translated into equivalent increases in consumption inequality. In
other words, most Americans are able to use savings and borrowing to
maintain stable living standards even in the face of economic ups and
downs. And those standards are much higher than those of the
all-in-the-same-boat era.

Mr. Hacker, however, shows little
interest in providing such context or balance. Fully committed to what
could be called a "free market bad, big government good" narrative, he
simply ignores data that point in the other direction. Thus he
lambastes reforms such as Health Savings Accounts and Social Security
privatization for shifting risks onto individuals while failing to
mention that the policy status quo imposes massive risks of its own.

I know Brink has been finishing up his new book.  I would love to see him start blogging again.

More Thoughts:  I have a couple of thoughts of my own on the risk issue:

• Risk, I guess defined as income volatility, may be higher for the average person today that it was in 1970.  However, in a broader context, it is still drastically lower than any time in history or than in most places in the world.  Certainly pre-WWII people had substantially more risk in their income, particularly in the agricultural sector, which dominated the economy of this and other countries through most of history.  In subsistence agricultural economies, every year even the most productive and competent people face not just the risk of income loss but starvation and extinction through factors wholly beyond their control.
• The vast majority of the risk reduction people experienced in this country after WWII came from the operation of the private market economy, and not from government programs.  It was the incredible productivity growth, export growth, and technology growth of American industry that provided whatever security people might be nostalgic for.
• Further, the author worries about a risk-shift.  But in the 50′s and 60′s, there was very little risk in the system.  Corporations faces little risk in world markets, executives at corporations faced little risk to their jobs, and most workers faced little risk.  There has not been a risk shift — this implies there was once some Atlas that bore the burden of all this risk and has now shrugged.  One might argue that there is more risk in the whole system – corporations are not guaranteed their market share so workers are not guaranteed their jobs.  The author tries to make it a populist argument, as if rich folks are shrugging off risk onto the poor.  The fact is that everyone faces more income volatility today, from largest corporation to lowest paid worker.  The good news, as Mr. Lindsey points out, is that this volatility is around a much higher mean.
• The costs of income security programs were always funded by workers
  themselves.  There was never a time when this security was provided by a mythical "someone else".  General revenue programs like welfare and defense over
  the last 30 years have been effectively funded by "the rich", since by
  any definition, that is who pays the income taxes.  However, programs
  like social security, Medicare, and unemployment are all based on
  payroll taxes with caps that mean that most of the tax is paid for by
  the poor and middle class themselves  (some of these are technically
  paid as a percentage of wages by the employer, but trust me that they
  have the same effect on take-home pay as if they had been deducted
  directly from the employee’s check).  To the extent workers have
  security, it is only because they have been forced to buy and pay for
  an insurance policy.  So again, there can be no shift, because the workers bore the cost of the insurance themseleves.  Are they getting good value for this insurance?  I don’t know –
  nobody knows.  Many reform proposals the author worries will further
  increase risk in fact are structured to put this insurance premium back
  in the hands of the worker, to let him or her decide if and how they
  want to spend it to insure themselves.
• The current obsession with this topic of risk strikes me as a case of white collar bias.  I am not sure anyone but the highest seniority workers ever had this mythological income security in the blue collar sector.  Layoffs and technology-based job obsolescence that created turmoil for blue-collar workers never seemed to touch white collar workers in the same way.  My sense is that what’s new today is that middle class white collar workers are now facing these same forces of change, in many industries for the first time.  In fact, a skilled machinist is probably more secure in his job today than an account paybables clerk.  For years, the left has joined unions in criticizing companies like GM for continually cutting blue collar jobs without touching bloated white collar payrolls.  It’s odd to see them jump suddenly to the other side of the issue.
• I hate to point out the obvious, but what government income-risk-management program has gone away since 1970, other than welfare reform?  Social Security, unemployment insurance, food stamps — they all exist, most at levels higher than 1970.  Government-funded health care programs cover far more people for far more stuff.
• Certainly some private practices have changed that may affect employee risk.  It is interesting that the author mentioned 401K’s.  To Hacker, shifting from defined benefits pensions to 401K’s is an increased risk.  I am sure he would point in part to plans like Enron’s where 401K holders took a bath because they were encouraged to funnel a lot of their savings into Enron stock.  But most 401K plans don’t work that way, and it does not matter since defined benefit plans are even worse.  Defined benefit plans presuppose that the company you work for will remain financially solvent for decades, and they assume workers will never switch jobs, since they are not very portable.  Defined benefit plans are horrible for workers  — it reduces their flexibility and increases their risk.  401K’s are a fabulous, worker-empowering invention and are bad only for a few union leaders and large pension fund managers (e.g. Calpers) who gain political power by virtue of the money they control.
• Yes, many jobs are less stable, but there is no evidence that there are long-term unemployed people out there.  The nature of the people losing work and the job market today has changed, such that there are much better tools to find new work, and there is more work out there for their skills.  White collar workers today probably find new work easier than blue collar workers in West Virginia ever did in the 1950′s and 1960′s when the mines closed.  My guess is that most everyone from Enron has found a new job (or jail cell).  There are people in Appalachia who still haven’t found a job 40 years after the mine closed.

My company runs recreation areas, and from time-to-time customers try to file claims against our company for dangers that are inherent to being out in nature  (example:  "I was climbing a tree out in the forest and fell down and hurt myself.  Your company needs to pay my medical bills.")

As a result of these experiences, I laughed when I saw this from the Nelson Rocks Preserve, who run a private nature park.  Here is just part of their disclaimer:

The Preserve does not provide rangers or security personnel. The other people in the preserve, including other visitors, our employees,
agents, and guests, and anyone else who might sneak in, may be stupid,
reckless, or otherwise dangerous. They may be mentally ill, criminally
insane, drunk, using illegal drugs and/or armed with deadly weapons and
ready to use them. We aren’t necessarily going to do anything about it.
We refuse to take responsibility.

If you climb, you may die or be seriously injured. This is true whether
you are experienced or not, trained or not, equipped or not, though
training and equipment may help. It’s a fact, climbing is extremely
dangerous. If you don’t like it, stay at home. You really shouldn’t be
doing it anyway. We do not provide supervision or instruction. We are
not responsible for, and do not inspect or maintain, climbing anchors
(including bolts, pitons, slings, trees, etc.) As far as we know, any
of them can and will fail and send you plunging to your death. There
are countless tons of loose rock ready to be dislodged and fall on you
or someone else. There are any number of extremely and unusually
dangerous conditions existing on and around the rocks, and elsewhere on
the property. We may or may not know about any specific hazard, but
even if we do, don’t expect us to try to warn you. You’re on your own.

Rescue services are not provided by the Preserve, and may not be
available quickly or at all. Local rescue squads may not be equipped
for or trained in mountain rescue. If you are lucky enough to have
somebody try to rescue you or treat your injuries, they may be
incompetent or worse. This includes doctors and hospitals. We assume no
responsibility. Also, if you decide to participate in a rescue of some
other unfortunate, that’s your choice. Don’t do it unless you are
willing to assume all risks.

By entering the Preserve, you are agreeing that we owe you no duty of
care or any other duty. We promise you nothing. We do not and will not
even try to keep the premises safe for any purpose. The premises are
not safe for any purpose. This is no joke. We won’t even try to warn
you about any dangerous or hazardous condition, whether we know about
it or not. If we do decide to warn you about something, that doesn’t
mean we will try to warn you about anything else. If we do make an
effort to fix an unsafe condition, we may not try to correct any
others, and we may make matters worse! We and our employees or agents
may do things that are unwise and dangerous. Sorry, we’re not
responsible. We may give you bad advice. Don’t listen to us. In short,
ENTER AND USE THE PRESERVE AT YOUR OWN RISK. And have fun!

Hat tip: Overlawyered.

Ted Frank has this update on Vioxx litigation, and it couldn’t possibly be more depressing:

Take, for example, the last
case Merck lost, that of Leonel Garza in south Texas. Mr. Garza, who
was said by plaintiffs to have taken Vioxx for three weeks, was a
71-year-old overweight smoker, with high cholesterol, decades of heart
disease, and a history of a heart attack and a quadruple bypass, yet a
jury awarded his survivors $7 million in "compensatory" damages, and
punitive damages to boot

He goes on to recount the very reasonable suspicion that Garza may not have even taken Vioxx at all, as he never had a prescription and his doctor has denied that he passed Garza a series of free samples in little brown bottles.

So out of eleven cases that
have gone to trial or almost gone to trial, there is a reasonable
suspicion that plaintiffs faked Vioxx usage in as many as five of them.
How many more of the tens of thousands of pending plaintiffs have
similar flaws?

He concludes with this excellent point:

Perhaps appellate courts
will get around to correcting these travesties, but the plaintiffs’ bar
is counting on enough bad verdicts to slip through the cracks to make
these cases profitable.

The equation of expected returns is certainly helped by the fact
that no one is even suggesting that presenting this sort of
questionable evidence is unethical, much less illegal. Drug safety is
important, but so are the health costs from vaccines and drugs not
marketed because of liability risks. If the judicial system cannot
police itself adequately, the question then becomes why we want to
entrust national drug safety policy to an elected judge and a handful
of randomly selected jurors in Starr County, Texas?

Props to Merck for fighting each and every case so far and resisting the mass tort pressure to start offering settlements to anyone who asks for one.

Tom Kirkendall has another excellent roundup of the Lay/Skilling trial.  According to Kirkendall, the prosecution is having some trouble, and in fact have wandered pretty far afield from their original indictment (a document that the prosecution now actually has disowned).  In effect, Lay and Skilling seem to be being tried for different things than they were ostensibly brought to trial for.  Most interesting is this:

On the other hand, the Task Force’s case to date has wandered away from
the SPE’s, so there is a decent chance that a difficult-to-control
Fastow could end up being a not-so-important witness in the
ever-changing big scheme of this corporate criminal case of the decade.

If Kirkendall is reading the trial correctly, and the SPE’s and Fastow’s testimony are becoming irrelevant, then the trial has virtually nothing to do with anything we have heard about in the media about Enron.

Barrionuevo and Eichenwald, who have been following the trial for the NY Times, agrees that the government case is shifting but believe it is due to the strength of what has been presented so far.

A steady drumbeat of damaging testimony in the five-week-old criminal trial against the former chief executives, Jeffrey K. Skilling and Kenneth L. Lay,
has led legal experts to praise the government case presented so far.
That has raised questions about the risks prosecutors would run by
putting Mr. Fastow, the former chief financial officer, on the stand as
early as Tuesday.

I haven’t followed the testimony in any depth, so I can’t choose from these two point of views, except to say that the government tactics of essentially changing the charges mid-trial and suppressing defense witnesses by naming a record number as unindicted co-conspirators may or may not be effective, but strike me as fairly scary abuses of the justice system.

The other day in my post on Politics without Philosophy, I mentioned in passing the philosophical inconsistencies on the National Organization for Women (NOW) website.  Specifically, I referred to the premise that women should control the decision-making for their own body (a premise I accept) and noted the inconsistency of some of their positions, notably opposition to breast implants, with this position.  As usual, I got several emails on "my attack on women", which is pretty normal nowadays:  People tend to associate an attack on an organization purporting to represent a certain group with an attack on the group itself. 

Anyway, this post was just going to be an update, to provide the specific links on NOW’s seemingly conflicting positions on abortion and breast implants, but in the process, I discovered another very interesting inconsistency, which I will get to in a few moments (its in bold at the bottom if you really can’t wait).

In posting on the breast implant – abortion conundrum, I should have linked to this post, where I explained in more detail:

When it comes to defending abortion, women’s groups are great
libertarians. They will point out that abortion is about the right to
choose and about protecting the "fundamental civil and human right of
women to make the most intimate decisions about their bodies and their
lives".  Its about not letting the government interfere with individual
decision-making or a "woman’s right to privacy".  Its about assuming
women are grown-up enough to make difficult choices about their fetus
and their own health and safety.  Opponents of such choice are
"ultra-conservatives trying to deny women control over their own
bodies".  (all quotes from the NOW web site).

So, women’s groups seem to be good libertarians concerned with the primacy of women’s decision-making over their own body.  Except when they’re not.
NOW has been feverishly campaigning to get the government to limit a
women’s right to choose breast augmentation, despite the fact that the
science is overwhelmingly behind the safety of implants.  Sure, as in
any medical procedure, there are some risks, but I defy anyone to tell
me that the risks associated with breast implants are greater than the
risks associated with abortion.  Abortion is a much weightier and more
difficult decision, and, unlike breast implants, it is irreversible.
If women are mature enough to make abortion decisions, they certainly
are mature enough to weigh the risks of breast implants.  Or take the
birth control pill — the impact to a woman’s body of silicone sacks in
their boobs is far less than that of trashing their entire hormone
balance.  Sure, the pill makes sense for a lot of people and its great
that the option exists, but don’t tell me that the the changes the pill
engenders in the body are OK but bags of silicone are not.

Note that if you accept the notion of a woman’s right to choose for her own body, the risks of breast implants shouldn’t matter.  A good government might make sure these risks are revealed, but would leave decision making on the risks vs. rewards to the individual.  For the sake of completeness, though, here is NOW’s argument that breast implants are just too risky and here is the counter-argument, supported by most scientists and the medical profession, that there is nothing wrong with them.  Note, however, the NOW would not tolerate casting the abortion debate around safety or risk, arguing in that case that it is up to the woman to make these informed trade-offs.

Anyway, here is what I learned from grabbing a few of the links above.  Consistent with their position on breast implants (and their heavy funding from the tort bar) NOW also is criticizing the FDA for allowing the Vioxx painkiller on the market.

Whether it’s Vioxx or Bextra or silicone implants, the rule now
is ‘Buyer Beware, said [NOW President Kim] Gandy. The drug and device companies own
the FDA and it is the companies’ profit potential that rules the
review and approval process – except when the profit motive is
overridden by the White House morality police, as with the
morning-after pill.

Yep, the FDA is apparently not doing a good job in limiting the number drugs or procedures women choose to put in their bodies (more on Vioxx on the NOW web site).  But this is still not the really funny part, just another illustration of how NOW only seems to apply "Its her body" to abortion, rather than any other decision.  What was really interesting was this (emphasis added):

An assisted suicide
bill (AB 654) passed the Democrat-controlled Assembly Judiciary
Committee on Tuesday, following two hours of debate. It now moves to
the full Assembly, where a vote may come in May.

Groups
officially supporting the bill include the pro-euthanasia group
Compassion & Choices; the American Civil Liberties Union, the
California Alliance for Consumer Protection, the California National Organization for Women; the Conference of Delegates of California Bar Associations; Drug Policy Alliance Network; and End-of-Life Choices.

I am OK with legal suicide as the last-ditch pain-relief strategy, though I am uncomfortable allowing doctors to help, given the inherent conflicts (maybe create a new suicide midwife profession?)  Anyway, note from this that while NOW opposes women’s access to legal Vioxx, they support legal access to assisted suicide.  In case you are missing the full irony, I will restate it:  NOW supports the legality of a pain-relief strategy (assisted suicide) with a 100% chance of death but opposes the legality of a pain-relief strategy (Vioxx) with a less than 1% chance of death.

I don’t really mean to pick on NOW in particular.  As I said before, nearly any organization on the right or left tends tends to espouse contradictory positions in the same manner.  NOW is just a particularly easy target since it takes positions on so many things.  Also, I must admit that they particularly piss me off some, articulating a fine libertarian point of view that women, and not the government, should control decision-making for their own body, and then abandoning this premise on nearly every non-abortion topic they address.

Anyway, you can read more on how the left really doesn’t want to address the full implications of the Roe v Wade privacy right here.  If you want to understand why NOW takes the positions it does, beyond the usual we-know-better-what-is-good-for-women-than-they-do-themselves elitism, you might look at the NOW relationship to the tort bar.  NOW is usually prominently featured on the ATLA web site.

For nearly six years I was a consultant at McKinsey and for another six I held corporate staff roles and marketing leadership roles.  In these twelve years, I did a lot of presenting.  By the end of those 12 years, I felt like I knew about functionality in PowerPoint that the guys in Redmond didn’t know about.  But by the end of those 12 years, I had nearly abandoned Powerpoint as a medium and I avoid it like the plague today. 

The main reason is that I don’t like to be a slave to my slides.  So many presenters become trapped by their slides, redefining the presentation as getting through the slides in a given amount of time rather than getting their message across.  Today, I like to present to people, looking them in the eye, without any other visual effects to take their attention away from me or my message.  I will use a flip chart or a computer projector from time to time – there is always a need to punctuate your points with data and charts and pictures, but I don’t leave them up there after they have had their impact.  The projector goes off and focus is back on me and my message. 

At one company we made presentations using 2 or even 3 projectors
simultaneously, projecting multiple slides all at one time.  I remember
several key strategy presentations I gave using a hundred or more
slides.  Today, I know I could give those presentations better with
just 5 slides showing the key market research and cost data that drove
the decision, and then explaining the logic of our plan without any distractions behind me.

There is nothing I hate more than bulleted text slide after bulleted text slide.  There are only two possibilities from these slides:  Either they are easy to read, but then their message is so generic as to be meaningless; or they contain real content, making them hard to read in a presentation.  I prefer the latter, but save them for a leave behind that people can flip through after I am done.

Anyway, so much for my patented 20 minute semi-off-topic introduction to the real point of this post.  Via gongol.com comes this interesting analysis of how the use of PowerPoint might be affecting the quality of scientific presentations, and specifically looks at how PowerPoint may have impeded quality understanding of the risks that led to the Columbia accident.

Postscript: I must give credit where credit is due.  McKinsey takes the art of presentation very seriously, and did more for me than anyone in making me a good presenter of complex information, either in verbal or written form.  Their pyramid principal for writing was more useful to me than anything I learned in six years at Princeton and Harvard about the subject of communication.

I wrote about the Vioxx decision here as another defeat for personal choice. Marginal Revolution has a good post on gaps in the anti-Vioxx science.  Here is a taste:

…[E]ven if there actually is an elevated risk of the magnitude the studies
suggest but can’t prove, the question is whether I might want to accept a 1 in 4,000 risk of dying
from a heart attack in order to get the only medication timt
makes my pain bearable and a mobile life livable.  And if I say no to the
Vioxx, I may end up taking something that is less effective for my pain but has
risks of its own.

…. How did we arrive at a system in which 12 random Texans are assigned
responsibility for evaluating the scientific merits of statistical evidence of
this type, weighing the costs and benefits, and potentially
sending a productive blue-chip American company into bankruptcy protection?

When it comes to defending abortion, women’s groups are great libertarians. They will point out that abortion is about the right to choose and about protecting the "fundamental civil and human right of women to make the most intimate decisions about their bodies and their lives".  Its about not letting the government interfere with individual decision-making or a "woman’s right to privacy".  Its about assuming women are grown-up enough to make difficult choices about their fetus and their own health and safety.  Opponents of such choice are "ultra-conservatives trying to deny women control over their own bodies".  (all quotes from the NOW web site).

So, women’s groups seem to be good libertarians concerned with the primacy of women’s decision-making over their own body.  Except when they’re not.  NOW has been feverishly campaigning to get the government to limit a women’s right to choose breast augmentation, despite the fact that the science is overwhelmingly behind the safety of implants.  Sure, as in any medical procedure, there are some risks, but I defy anyone to tell me that the risks associated with breast implants are greater than the risks associated with abortion.  Abortion is a much weightier and more difficult decision, and, unlike breast implants, it is irreversible.  If women are mature enough to make abortion decisions, they certainly are mature enough to weigh the risks of breast implants.  Or take the birth control pill — the impact to a woman’s body of silicone sacks in their boobs is far less than that of trashing their entire hormone balance.  Sure, the pill makes sense for a lot of people and its great that the option exists, but don’t tell me that the the changes the pill engenders in the body are OK but bags of silicone are not.

The real issue, as pointed out early and often by Virginia Postrel, is that feminists consider breast implants as at best frivolous, and at worst a demeaning surrender to male objectification of the female’s body.  They don’t think women who choose these implants are making the right choice, so they, in their elite holier-than-thou wisdom, want to take the decision away from women.  Hmmm.  Freedom for me but not for thee.  More along the line of distrusting individual decision-making here.

Update:  My main point of this post was on breast implants, and comparing feminist retoric on that issue vs. their retoric on abortion.  I feel the need, though, to mention that I don’t accept that abortion is necesarily a pure individual choice situation.  Individual decision-making should be trusted when individuals make choices that affect only themselves, without coersion or fraud.  The problem in the case of abortion is whether the fetus is a piece of tissue that is a part of a woman’s body, or an independent life.  In the former case, its removal is subject to individual decision making, but not in the latter.  As I have written before, I think the fetus is protoplasm at 1 week and a baby at 8 months.  At some point in between we draw an arbitrary line between part-of-the-mom and independent life.

Many abortion supporters, unwilling to risk that society might draw this line earlier in the pregnancy than they might want it, take the extra step of arguing that the very determination of whether the fetus is a life or not at 2 or 5 or 7 months should be up to individual taste, and that the government should have no say in that determination.  That strikes even me as the hardcore libertarian as going too far.  Certainly in its limited role of protecting individual rights, the government has a role in determining just who is an individual with rights subject to protection.  Determining if a fetus is an individual with independent rights and at what point in the pregnancy it is treated as such are reasonable roles for government legislation.

Over the last two days, Phoenix put out an order to boil tap water before drinking and not to bathe or shower.  Many restaurants closed for the two day period, and many many people went out and loaded up on expensive bottled water.

What I found interesting was that through the whole "crisis", and now after the fact, Phoenix officials continued to say that they thought the water was safe, that they had not gotten any bad test results, but that people still shouldn’t use the water "as a precaution".

Given the current state of liability and torts, I probably would have done the same in their shoes, but is this really the world we want?  There are costs to shutting off water in a city of 2 million plus people.  Shouldn’t those costs be justified by some real risk? 

When I was an engineer, my job was often to rule on whether some condition was "safe".  Every day I had to make decisions like "should we shut this part of the plant down, or can we keep running it safely".  Certainly we wanted to err on the side of safety, but ruling every little concern as cause for shutdown would have caused the plant to be shut down almost all the time.  In that job, I had to take responsibility and make a decision, balancing risks and costs.  People want to say that shutting the plant (or the water system) at every hint of a problem is the "responsible" thing to do — but in fact it is just the opposite.  It is an avoidance, both of decision-making and responsibility.

Unfortunately, no one wants to make such decisions anymore.  My wife’s mammogram had something on it the doctor said he was 100% sure was just an artifact of the photography, but to cover his butt he said he had to get her to go have a biopsy (painful, expensive, and time-consuming) which was of course negative.  We are loading the economy down with risk-defense costs, an invisible tax that is already hammering the medical field.

But beyond just the costs, at what point does this hair-trigger defensive posture lead to a chicken-little syndrome where no one pays attention to warnings any more?  I know that the next time we get a warning about Phoenix water, I will be much less likely to be careful, because I remember that the last time nothing was really wrong with the water.  How many people pay attention to homeland security alerts any more?  Do you even bother to read warning labels any more, on the off chance it is a useful warning and not a "this toaster should not be used as a water ski" type warning?

In this post on Social Security reform at Powerline (Time blog of the year, congrats guys) they take as a starting point a Sabastian Mallaby article in the WaPo who says:

Privatizing social security would increase stress levels, says Mallaby, because determining where to invest one’s retirement money entails making tough choices and taking risks. Thus, Mallaby believes that many, perhaps even most, people would prefer to have the government handle their social security funds as it does now than to "agonize over health stocks vs. Asian bonds."

In this we see two things that characterize liberals and progressives:  "1) distrust of individual decision-making and 2) willingness to accept much less wealth in return for more certainty.  By the way, I have no particular problem with #2 when this decision is made on an individual level.  However, I do have a problem when politicians make this decision at a societal level.  As regards Social Security, I have no problem with people being offered the "let the government continue to keep your money" option as long as it is voluntary.  The Powerline guys have other good comments, read the whole thing.

By the way, I will take a moment for a bit of "I told you so" here.  This "capitalism is too stressful for us dude" attitude is entirely consistent with what I said about progressives and capitalism here.

UPDATE:

Here is a nice post on the same topic at Cafe Hayek.

An article I saw on a new process for creating hydrogen via nuclear power (courtesy of the Commons) got me to thinking about what a screw-up our first (and really only) generation of nuclear power plant building was.  Learning curve problems with a new technology, combined with an insane regulatory regime and uninformed panicky public response to nuclear power issues led to a shut down in the construction of nuclear power plants, and made the last ones built into memorable financial disasters. 

Coming from the aerospace industry, I am used to a strong regime of government safety regulation.  The differences in how aircraft construction and nuclear power construction are regulated are very informative, so I want to focus on them in this post.

First, however, its instructive to list some of the reasons why nuclear power is attractive:

• Excepting the radioactive waste issue, which we will discuss below, nuclear power is essentially emissions free, and is totally devoid of any greenhouse gas emissions that may contribute to global warming.  There are also no particulate emissions or sulfur dioxide emissions, which are blamed for various woes.
• Nuclear fuel, ie uranium and potentially thorium, is incredibly abundant and currently inexpensive.  Also, much of the world’s reserves are located in free democracies rather than Islamic dictatorships

Nuclear Plant Regulation

Nuclear plants in the U.S. were mainly designed as one-offs.  In other words, each one was a relatively unique design.  Each design therefore required regulatory review and approval in depth, processes that could take years.  Since the process took so long, changes in personnel or public attitudes often resulted in revisiting certain already approved design decisions, sometimes even after that part of the plant was built, resulting in expensive modifications.

In addition, uninformed public hysteria was allowed to take precedence in the permitting process ahead of fact-based scientific analysis. That is not to say that there are not potential dangers – Chernobyl proved that, but one can pretty easily argue that Chernobyl was more consistent with Soviet era mega-industrial disasters that occurred in many industries than the general experience with nuclear power. 

In most cases, the public has no real idea of the risks of nuclear plants, especially vs. other risks they might face.  People who might never live in the vicinity of a nuclear plant live downwind of plants using hydrogen cyanide or hydrogen sulfide as process gasses; or near plants with the potential for runaway exothermic reactions, leading to explosions and/or toxic gas releases (Bhopal anyone?)  Far more people were killed by the explosion of a shipful of fertilizer in Texas City than have been injured by nuclear power in the United States.

Aircraft Regulation

If aircraft construction was regulated like nuclear power plants, there would be no aviation industry.  In the aircraft industry, aircraft makers go through an extensive approval and testing process to get a basic design (e.g. the 737-300) approved by the government as safe.  Then, as long as they keep producing to this design, they can keep making copies with minimal additional design scrutiny.  Instead, the manufacturing process is carefully checked to make sure that it is reliably producing aircraft to the design already deemed safe.  If aircraft makers want to make a change to the aircraft, that change must be approved with a fairly in-depth process.

Beyond the reduction in design cost for the 2nd airplane of a series (and 3rd, etc.), this approach also yields strong regulatory benefits.  For example, if the actuation screw for the horizontal stabilizer is deemed to be of poor or unsafe design in a particular aircraft, then the government can issue a bulletin to require a new approved design be retrofitted in all other aircraft of this series.  This happens all the time in commercial aviation.

One can see how this might make nuclear power plant construction viable again.  Urging major construction companies to come up with a design that could be reused would greatly reduce the cost of design and construction of plants.  There might still be several designs, since competing companies would likely have their own designs, but this same is true in aerospace with Boeing, Airbus and smaller jet manufacturers Embraer and Bombardier.

Nuclear Waste

The nuclear waste disposal problem is still not fully solved, but technology is making inroads, as in here and here and here.

I would argue that the issue of nuclear waste is a red herring anyway — waste from nuclear power is not necesarily worse than from other processes, its just more visible and scary sounding.  Current power plants generate millions of tons of waste a year.  However, since they spread this waste evenly throughout the atmosphere, it doesn’t always call attention to itself.  Radioactive waste, though small in volume, tends to be concentrated and admittedly tricky to handle.  It can’t be just dumped in the air or in the water and forgotten about – it has to be actively tended for years.

Other Reading

Increasingly, many environmentalists are starting to revisit their opposition to nuclear power as the environmental costs are better understood (even technologies formally much-loved by environmentalists are coming under scrutiny for their costs — do we really want all of our wilderness to look like this and this?)  Such articles include this and this.  Other roundups about the benefits of revisiting nuclear power are here and here.

UPDATE

My gut feel is that nuclear power, if intelligently regulated, could be economically competitive with many other energy sources today, but I don’t know for sure.  Jerry Taylor and Co. at Cato think otherwise, and they have certainly put a lot more research into it than I have.  I am certainly loathe to start US energy policy, complete with massive subsidies, down yet another uneconomic blind alley.